The Foundation of the U.S. Economy Appears to Be Breaking, and Wall Street Has Turned a Blind Eye

Economic Indicators - The delinquency rate for commercial mortgage-backed securities (CMBS) reached an all-time high of 11.76% in October 2025, increasing almost tenfold since 2023 and surpassing levels seen after the financial crisis [1] - Auto loan delinquencies have also surged, with the Auto Loan 60+ Delinquency Index hitting 6.65% in October, the highest since the Great Recession [9] - The share of U.S. credit card balances in arrears for at least 90 days rose to 12.41% in Q3 2025, the highest since Q1 2011, indicating a concerning trend in consumer credit health [12][13] Market Performance - Despite economic concerns, major stock indexes like the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average have reached multiple record-closing highs in 2025, suggesting a disconnect between market performance and economic fundamentals [6][7] - The ongoing rate-easing cycle by the Federal Reserve is seen as a catalyst for increased borrowing and potential growth in hiring and M&A activity [4] Economic Outlook - There are indications that the foundation of the U.S. economy is weakening, with Wall Street seemingly ignoring these signs [3] - Historical data suggests that economic cycles are not linear, with recessions being a normal part of the economic landscape, and the average U.S. recession lasting around 10 months [16][17]